TL;DR
The US market extended its gains yesterday, with the S&P 500 closing at 7,473.47, up +0.37%. The Nasdaq 100 outperformed, rising +0.42% to 29,481.64. Beneath the surface, sector rotation continues to favor tech and healthcare, with the XLK and XLV ETFs leading the charge.
Despite the positive tone, there are signs of caution. The VIX remains elevated, and the 10Y Yield fell -0.61% to 4.56. This could be a sign that investors are becoming increasingly risk-averse, and that the market may be due for a correction.
US Session Recap
| Index/Asset |
Level |
Change |
Why it moved |
| S&P 500 |
7,473.47 |
+0.37% |
Tech and healthcare gains |
| Nasdaq 100 |
29,481.64 |
+0.42% |
Tech sector strength |
| Dow Jones |
50,579.70 |
+0.58% |
Broad-based gains |
| Russell 2000 |
2,869.23 |
+0.91% |
Small-cap outperformance |
| VIX |
16.70 |
-0.36% |
Volatility remains elevated |
Top Large-Cap Movers
| Ticker |
Change |
Catalyst |
| AAPL |
+1.26% |
Tech sector strength |
| TSLA |
+1.95% |
Electric vehicle demand |
| NVDA |
-1.90% |
Chip sector weakness |
Sector Rotation
| ETF |
Day |
Read |
| XLK |
+1.00% |
Tech sector strength |
| XLV |
+1.17% |
Healthcare sector gains |
| XLF |
+0.41% |
Financial sector stability |
| XLI |
+0.73% |
Industrial sector gains |
| XLE |
+0.61% |
Energy sector strength |
| XLY |
+0.40% |
Consumer discretionary gains |
| XLC |
-0.55% |
Communication services weakness |
| XLP |
+0.17% |
Consumer staples stability |
| XLU |
+0.78% |
Utilities sector gains |
| XLB |
+0.54% |
Materials sector strength |
| XLRE |
+0.13% |
Real estate sector stability |
Spotlight
The biggest event of the day was the +1.95% gain in TSLA, driven by strong demand for electric vehicles. This has positive read-through to other names in the sector, such as GM and F.
| Metric |
Value |
Read |
| Electric vehicle sales |
+10% |
Strong demand drives TSLA gains |
| TSLA market cap |
$1.2T |
TSLA remains a market leader |
US futures are pointing to a flat open, with the S&P 500 futures trading at 7,470. Asian markets were mixed, with the Nikkei 225 down -0.5% and the Shanghai Composite up +0.2%. European markets are also mixed, with the Euro Stoxx 50 down -0.2% and the FTSE 100 up +0.1%. Cryptocurrencies are under pressure, with BTC down -2.63% to 75,502.79 and ETH down -3.03% to 2,066.87.
Macro & Fed
The 10Y Yield fell -0.61% to 4.56, while the 2Y Yield rose +0.1% to 4.32. The yield curve remains inverted, with the 10Y-2Y spread at -0.24%.
| Time HKT |
Release |
Consensus |
Why it matters |
| 20:30 |
Durable Goods Orders |
+0.5% |
Manufacturing sector health |
| 22:00 |
Consumer Confidence |
120 |
Consumer spending trends |
Geopolitics & Global
- Tensions between the US and China remain high, with the US imposing new tariffs on Chinese goods.
- The EU and UK are nearing a trade deal, which could boost economic growth in the region.
- The situation in the Middle East remains volatile, with ongoing conflicts in Syria and Yemen.
Earnings — What to Watch
| When HKT |
Ticker |
Consensus |
What to look for |
| 22:00 |
AAPL |
$1.25 |
iPhone sales and guidance |
| 23:00 |
AMZN |
$2.50 |
Cloud computing and e-commerce growth |
Watchlist Scan
| Ticker |
Sector |
Why now |
| MSFT |
Tech |
Cloud computing growth |
| JPM |
Financials |
Interest rate trends |
| GOOGL |
Tech |
Advertising and cloud growth |
What Could Break the Tape
BULLISH TRIGGERS
- Strong earnings reports from major tech companies
- Improving economic data, such as GDP growth and job creation
- Positive developments in US-China trade talks
BEARISH TRIGGERS
- Weaker-than-expected earnings reports from major companies
- Deteriorating economic data, such as slowing GDP growth and rising unemployment
- Escalating tensions in the Middle East and other global hotspots
Positioning Notes
- Investors are becoming increasingly risk-averse, as evidenced by the elevated VIX and falling 10Y Yield.
- The yield curve remains inverted, which could be a sign of a looming recession.
- Sector rotation continues to favor tech and healthcare, with the XLK and XLV ETFs leading the charge.
Sources